After both the Prohibition era and COVID-19, the alcohol industry started evolving at a rapid pace. As such, the industry has gained extreme significance recently. The alcoholic beverage industry now has millions of stores around the world. Recently, we've even seen an increase in business owners taking the opportunity to start selling alcohol online. Alcohol sales have even been seen in the same sentence as flat rate shipping.
If the alcohol industry interests you, now more than ever is the time to dive in and learn some efficient business systems. Doing so online is a unique opportunity in and of itself. In 2017 alone, online sales of wine, liquor, and beer grew at a rate of 37% in the U.S. alone. However, this growth has yet to cease. So taking advantage of this growth is a tremendous opportunity.
While starting an eCommerce business sounds daunting, it’s easier if you have all your ducks in a row. Everything starts with an eCommerce business plan and understanding the basic B2C meaning. In this article, we'll cover what an online liquor store is, what it encompasses, the supplies you need to get started, and more!
What Is an Online Liquor Store?
An online liquor store is an eCommerce store that sells beer, wine, and other notable spirits. Nevertheless, before you can open a business or pave your way to becoming one of the best eCommerce businesses, there's still a lot you need to know. That includes learning how to ship wine, and why you should opt for expedited shipping.
Historically, selling alcohol has been most realistic for businesses such as grocery stores that already sell wholesale products. Other online marketplace apps exist for the sole reason of delivering alcohol to consumers. For brews, pubs, bars, and restaurants, the same hasn't always been true.
However, the business climate has changed. As such, the ability to sell liquor online is now a reality. So, for those who are ready to take the bold first step and get started, you'll first need a business plan.
Business Plan for Starting an Online Liquor Store
Starting an online liquor store is an exciting adventure for the avid business owner. Even still, just like any other business, knowing how to write a substantive business plan is critical to your success.
Entering the online bar management industry can present specific industry concerns. Regardless of what you intend to use your business plan for, there are some key items to address so as to not run into issues down the line.
Company and Concept Description
When creating your business plan, start with describing your bar in general terms. This means you'll take a look at your bar's theme, atmosphere, business structure (partnership or sole proprietorship, for instance), and value proposition.
From there, you can hone in on the desired outlook for your business. This is the time to answer questions like: How will you protect yourself from negative aspects and how will you take advantage of positive ones? Also, identify who your target audience is, niche market size, and potential areas of growth.
Each of these details can make a difference in how your online store is perceived by customers. After you've figured those details out it's time to describe how you'll support your business growth through marketing efforts and eCommerce customer service.
Market and Competitive Analysis
Next, it's time to define your market strategies by conducting a market analysis as well as an eCommerce competitor analysis. With these two strategies, you'll gain a broad view of your target customers as well as your competition.
Now is the time to carefully comb through your list of competitors. Figure out what they're doing right, and where there are areas of opportunity for your business.
You might also benefit from surveying potential customers in order to gain insight on pain points and things they're missing from your competitors. Through surveys, you'll also identify important demographics like shopping times, the potential number of interested customers, and consumer interests.
Use these strategies together in order to pinpoint what works best for your company. Then, compare and contrast your desired strategy to your competitors and determine your path to success.
How to Start an Alcohol Delivery Service
Alcohol delivery is a fairly new practice. However, that doesn’t mean it can’t be done. To ensure you’re taking the right steps and measures, take a look at some of the following tips to help get you started on the right foot.
- Check your local and state guidelines. You'll want to find out if there are any off-premises alcohol sales rules or consumption rules that might apply to you.
- Next, you'll want to obtain your wholesale license and certifications where applicable. There are no additional licensures that you need to deliver alcohol. However, you will need to get a liquor license.
- From here, it's time to find a service delivery method that meets your state's requirements. Your state might allow you to provide at-home delivery. If this is the case, start looking at internal delivery systems to integrate with your business. A few states permit the use of third-party delivery services for orders containing alcohol. If you live in those states, establish a qualifying third-party delivery service (see 3pl meaning) partnership.
- For liquor delivery services it's best to curate a tailored drink menu design. This menu showcases the alcohol you offer for delivery and pickup.
- If necessary, purchase supplies you'll need to put your cocktail drinks and kits (see kitting) together.
- Finally, purchase additional supplies like bar glasses, jiggers, pints, and additional supplies your customers might want to purchase separately. These tools help them recreate the drink as a bartender would.
Where to Buy Alcohol Stock
When starting an online alcohol business, you'll get your liquor from websites or in-person alcohol wholesalers. Wholesale liquor is a collective term for wholesale alcohol. It refers to liquor being sold in large amounts to a retailer, who then sells the product for a better price to consumers in his area.
The wholesale aspect tells us the liquor sells in large amounts, per wholesale moq, therefore buyers receive significant price advantages. In turn, wholesalers are able to make a profit by reselling the spirits to consumers.
Thanks to liquor wholesalers, the B2C model works as buyers get their alcohol cheaper. This way, a large profit can be made on single bottles.
If you are looking to start a wholesale alcohol business, you should know that buying your alcohol in bulk can save you a lot of money. Apart from that, you are able to negotiate better deals when larger orders are being placed.
There are many places you can sell liquor online. Here are some of the most commonly used:
Frequently Asked Questions About Starting an Online Liquor Store
How Do I Market My Online Liquor Store?
You can market your liquor business by doing the following:
- Using proven SEO strategies such as eCommerce keyword research, using high volume SEO terms, and eCommerce content marketing.
- Sponsor local events, like tasting, and retain those customers.
- Take advantage of social media. There are various apps out there today that can help you boost your marketing efforts. Moreover, once you find the app that works best for your business, you can leverage that to reach a larger audience.
How Profitable Is a Liquor Business?
For a brick and mortar shop, stores located in a less populated area or state can expect to make around $70,000 per year. In higher-traffic areas, stores will make an average of between $100,000 and $150,000. If you learn how to print shipping labels at home, you may cut costs and profit more when delivering products to customers.
What Is Liquor Cost Percentage?
At its simplest, liquor cost is the price you pay to purchase alcohol from distributors. Liquor cost is also referred to as pour cost and beverage cost.
It's important to keep your pour cost low (by adhering to standard pour directives) because the higher the cost the less profit you make. Your pour cost percentage is a variable cost you have significant control over.
How Do You Calculate Liquor Cost Percentage?
You can calculate your liquor cost percentage by using the following formula:
Total Liquor Cost Percentage = Total Cost of Goods Sold / Total Alcohol Sales x 100